Credit Union Trade Groups Endorse CFPB Advisory Opinion Plan; Consumer Groups Oppose It

A Consumer Financial Protection Bureau proposal to allow financial services providers and trade groups to apply for advisory opinions would help bring more certainty to the regulatory process, credit union trade groups said last week.

A coalition of consumer groups warned that the proposal would circumvent the regulatory process that is designed to protect consumers.

In announcing the proposal in June, the CFPB said that the proposal, if adopted, would focus primarily on clarifying agency rules. “Under the program, parties will be able to request interpretive guidance, in the form of an [advisory opinion] to resolve such regulatory uncertainty,” the agency said.

The proposal also would allow trade groups or outside counsel to submit a request on behalf of a group of clients or members without those entities being named.

Comments on the proposal were due Friday.

While CUNA said it supports the proposal, Alexander Monterrubio, the trade group’s senior director of advocacy and counsel, warned the agency to avoid issuing advisory opinions that might stifle innovation. He also asked that financial service providers be given the opportunity to comment on proposed opinions.

Advisory opinions should only clarify the application of existing rules, not establish new regulatory burdens for credit unions, Elizabeth Young LaBerge, NAFCU’s senior regulatory counsel told the agency. She also suggested that the CFPB consult the agency’s Credit Union Advisory Council for any potential effects of specific proposed opinions.

However, a coalition of consumer groups, including the Center for Responsible Lending, and the Consumer Federation of America, said the CFPB should not issue opinions until all sides of an issue are heard.

The groups said under no circumstances should the CFPB allow trade groups to request opinions on behalf of unnamed third parties. Such a plan would “enable requestors to embroil the CFPB in private litigation or pending state or federal investigations, enforcement actions, supervisory actions, licensing or administrative proceedings,” they argued.


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